I will be picking up my first wholesale contract this week. I was wondering if i should set the deal up under an option to buy contract (with 3 month expiration) or a sale and purchase contract? Once the documents are signed do i just go and record it at the county?
I want to make sure that once i setup this contract that no one else can come in under me and pick up the house directly from my seller. How would i do this?
Are there any specific clauses i should have on my contract that would give me a few exit strategies?
Good questions Nick,
When puchasing I use a custom designed purchase/sale agreement and my name is Nick1216 and/or assigns. You can then sell your contract for a fee. Just sold a contract today for 15k. When I enter into an agreement with the seller I open escrow the same or next day, check for clear title and lien payoffs then go right to marketing the “contract”. You are not selling dirt at this point just paper. My buyers do not know they are buying paper just yet, once they qualify for the property I take the thing all the way through escrow and close. That way seller,buyer and myself all win with no blowback for me.
Hope this helps, Darin
Darin im glad there is a savvy investor like yourself on here :smile . I would like to get the “escrow thing” cleared up. if i am to put the contract into escrow , the benefit is i would place it in there for safe-keeping? Also i find out if there is any liens, or clear title on the house while it is in there? The “escrow thing” sounds like a plan to me…could you share a little more lite on this subject to me in plain english :banghead.
Thanks for your help and patience with me on this subject.
My advice is never to record your contract. It only makes for headaches later when you go to closing because it is a cloud you have created. I only file the contract as a last resort if I think the seller is trying to go around me. Also, opening escrow early is always recommended so they can identify any hair on the title early so you can get those problems resolved early. Nothing worse than trying to clear problems the day before closing.
I agree with Brandon,
Do not record the contract, just open escrow.
Double AA please take some time to go to an escrow office and see exactly what they do there.
It is a very important part of your developement. You will also need to ask the officer that you talk to if they are comfortable with and or assigns, double closes or dry closes. If they act like you are a criminal, go to the next office. Take the time to find an agency that will work with you and help you be successful. ASk how many signings she does a week if the answer is less than 25 then work with her. If it is more than 30 move to some one else as she will not have the time to work/train with you. I pay my Title lady 4-5 hundred after each closing as a bonus and yes it has been aproved by her boss. When I call she answers, she really goes out of her way for me. Some times you will need immediate results at the end of the month on a Wednesday because you just found a home run and you need to close by Friday. Guess who goes to the front of the line … You will too, go now, turn off computer, schedule Title meeting, be successful !
D